A, B and C were partners sharing profits int he ratio of 5 : 3 : 2 . On 31st March, 2018, A's Capital and B's Capital were ₹ 30,000 and ₹ 20,000 respectively but C owed ₹ 5,000 to the firm . the liabilities were ₹ 20,000 .The assets of the firm realised ₹ 50,000.
Prepare Realisation Account , Partner's Capital Accounts and Bank Account.

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Solution

Realisation Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Sundry Assets (WN)

65,000

Creditors

20,000

Cash A/c (Creditors)

20,000

Cash A/c (Assets realised)

50,000

Loss transferred to:

A’s Capital A/c

7,500

B’s Capital A/c

4,500

C’s Capital A/c

3,000

15,000

85,000

85,000

Partners’ Capital Accounts

Dr.

Cr.

Particulars

A

B

C

Particulars

A

B

C

Balance b/d

–

–

5,000

Balance b/d

30,000

20,000

–

Realisation A/c (Loss)

7,500

4,500

3,000

Cash A/c

–

–

8,000

Cash A/c

22,500

15,500

–

30,000

20,000

8,000

30,000

20,000

8,000

Cash Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Realisation A/c (Assets)

50,000

Realisation A/c (Creditors)

20,000

C’s Capital A/c

8,000

A’s Capital A/c

22,500

B’s Capital A/c

15,500

58,000

58,000

Working Note:

Memorandum Balance Sheet

as on March 31, 2018

Liabilities

Amount

Rs

Assets

Amount

Rs

Capital A/c

C’s Capital A/c

5,000

A

30,000

Sundry Assets

65,000

B

20,000

50,000

(Balancing Figure)

Other liabilities

20,000

70,000

70,000

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Similar questions

Q. A, B and C were partners sharing profits in the ratio of 5 : 3 : 2. On 31st March, 2019, A's Capital and B's Capital were ₹ 30,000 and ₹ 20,000 respectively but C owed ₹ 5,000 to the firm. The liabilities were ₹ 20,000. The assets of the firm realised ₹ 50,000.
Prepare Realisation Account, Partner's Capital Accounts and Bank Account.

Q. Balance Sheet of P, Q and R as at 31st March, 2018, who were sharing profits in the ratio of 5 : 3 : 1 , was:

Liabilities		Amount (₹)	Assets		Amount (₹)
Bills Payable		40,000	Cash at Bank		40,000
Loan from Bank		30,000	Stock		19,000
Reserve Fund		9,000	Sundry Debtors	42,000
Capital A/cs:		5,800	Less: Provision for D. Debts	2,000	40,000
P	44,000
Q	36,000		Building		40,000
R	20,000	1,00,000	Plant and Machinery		40,000

		1,79,000			1,79,000

The partners dissolved the business. Assets realised

—

Stock ₹ 23,400; Debtors 50%; Fixed Assets 10% less than their book value . Bills Payable were settled for ₹ 32,000. There was an Outstanding Bill of Electricity ₹ 800 which was paid off. Realisation expenses ₹ 1,250 were also paid.
Prepare Realisation Account , Partner's Capital Accounts and Bank Account .

Q. A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2 . On 31st March, 2018, their Balance Sheet was as follows:


Liabilities		₹	Assets	₹
Creditors		38,000	Cash at Bank	11,500
Mrs. A's Loan		10,000	Stock	6,000
B's Loan		15,000	Debtors	19,000
Reserve		5,000	Furniture	4,000
A's Capital	10,000		Plant	28,000
B's Capital	8,000	18,000	Investments	10,000
			Profit and LossA/C	7,500



		86,000		86,000

The firm was dissolved on 31st March, 2018 and both the partners agreed to the following :
(a) A took Investments at an agreed value of ₹ 8,000. He also agreed to settle Mrs. A's Loan.
(b) Other assets realised as : Stock

—

₹ 5,000; Debtors

—

₹ 18,500; Furniture

—

₹ 4,500; Plant

—

₹ 25,000.
(c) Expenses of realisation came to ₹ 1,600.
(d) Creditors agreed to accept ₹ 37,000 in full settlement of their claims .
Prepare Realisation Account, Partners' Capital Accounts and Bank Account .

PRACTICAL PROBLEMS

Anil and Sunil were partners sharing profits and losses in the ratio of 3:2. Their Balance Sheet as on 31^st March, 2009.

Balance Sheet as on 31^st March, 2009
Liabilities	Amount Rs	Assets	Amount Rs
Capital Account		Bank	30,000
Anil	50,000	Stock	25,000
Sunil	30,000	Debtors	70,000
Current Account		Plant	45,000
Anil	15,000	Building	35,000
Sunil	10,000
Creditors	87,000
Bills payable	13,000
	2,05,000		2,05,000

The firm was dissolved on the above date and the assets realised as under:

1) Stock Rs 20,000, Debtors Rs 60,000, Plant Rs 40,000 and Building Rs 30,000.

2) Anil agreed to pay off the bills payable.

3) Creditors were paid in full.

4) Dissolution expenses were Rs 7,000.

Prepare:

(i) Realisation Account

(ii) Bank Account

(iii) Current Account and Capital Account of the partners.

PRACTICAL PROBLEMS

Sushil and Sumit were in partnership sharing profits and losses in the proportion of 3/5 and 2/5 respectively. On 31^st March, 2005 they decide to dissolve the firm when their Balance Sheet was as under:

Balance Sheet as on 31^st March, 2005
Liabilities	Amount Rs	Assets	Amount Rs
Sushil’s Capital	20,000	Plant and Machinery	15,000
Sumit’s Capital	18,000	Stock	15,000
General Reserve	5,000	Sundry Debtors	22,000
Sumit’s Loan A/c	2,000	Bank	3,000
Sundry Creditors	10,000
	55,000		55,000

The Assets realised as follows: Stock Rs 14,000, Plant and Machinery Rs 12,000 and Debtors Rs 20,000. The Sundry Creditors were paid Rs 9,000 in full settlement.

Prepare: Realisation Account, Partners Capital Accounts and Bank Account.

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Realisation Account
Dr.					Cr.
Particulars	Amount Rs	Particulars		Amount Rs
Sundry Assets (WN)	65,000	Creditors		20,000
Cash A/c (Creditors)	20,000	Cash A/c (Assets realised)		50,000
		Loss transferred to:
		A’s Capital A/c	7,500
		B’s Capital A/c	4,500
		C’s Capital A/c	3,000	15,000
	85,000			85,000

Partners’ Capital Accounts
Dr.								Cr.
Particulars	A	B	C	Particulars	A	B	C
Balance b/d	–	–	5,000	Balance b/d	30,000	20,000	–
Realisation A/c (Loss)	7,500	4,500	3,000	Cash A/c	–	–	8,000
Cash A/c	22,500	15,500	–

	30,000	20,000	8,000		30,000	20,000	8,000

Cash Account
Dr.				Cr.
Particulars	Amount Rs	Particulars	Amount Rs
Realisation A/c (Assets)	50,000	Realisation A/c (Creditors)	20,000
C’s Capital A/c	8,000	A’s Capital A/c	22,500
		B’s Capital A/c	15,500

	58,000		58,000

Memorandum Balance Sheet as on March 31, 2018
Liabilities		Amount Rs	Assets	Amount Rs
Capital A/c			C’s Capital A/c	5,000
A	30,000		Sundry Assets	65,000
B	20,000	50,000	(Balancing Figure)
Other liabilities		20,000
		70,000		70,000